A modernization of Orange County, Calif.'s tax collection system that was supposed to take three years and cost less than $8 million will cost twice that amount and take twice as long.

Instead of pursuing completion, Orange County decided to give up. It abandoned the project, declared the software "fatally flawed," and then filed a lawsuit in April against the contractor.

The two sides, the county and the contractor, Tata Consultancy Services and its U.S.-based subsidiary, are now attempting reach a mediated agreement, according to the most recent federal court filing late last month.

In 2007, Orange County hired Tata America International Corp., a subsidiary of the largest offshore outsourcing firm in the world -- Mumbai, India-based TCS -- to develop custom software to handle most of the county's tax functions. The county collects some $4.5 billion in taxes a year.

Before hiring Tata, the county had used another contractor to develop the business documentation for the projects.That documentation ran more than 6,000 pages and outlined every aspect of the project, from legal requirements to operating systems.

Tata was the winning bidder for the job, at just over $8 million. As part of the contract, TCS proposed that all work on the tax project "be performed onsite at the county offices in Orange County." The county, in its lawsuit, believes that many of the project members TCS put on the project "worked and lived in India," contributing to delays and communications problems.

The lawsuit outlines many complaints, and says that TCS had claimed a 96% success rate in completing projects on-time and on budget. The tax system project's cost was rising above $16 million when the county pulled the plug.

The county, in its lawsuit, says it will have to start over from scratch. A TCS official was not immediately available for comment, but the company told the Orange County Register that it wouldn't comment on the lawsuit.